House Education Committee Clears Five Higher Education Bills

On Wednesday, the U.S. House of Representatives Committee on Education and the Workforce considered and passed five higher education bills, including three bills that solidify the use of prior-prior year (PPY) income data on the FAFSA, mandate annual loan counseling, and develop a new online consumer information tool. The other two pieces of legislation specifically impacted Historically Black Colleges and Universities (HBCUs) and Hispanic-Serving Institutions (HSIs).

A full recap of each bill passed out of committee can be found below.

Prior-Prior Year Income

HR 5528, the Simplifying the Application for Student Aid Act, takes several opportunities to solidify and strengthen the move to the use of prior-prior year (PPY) income data on the FAFSA. Rep. Joe Heck (R-NV) sponsored the bill with Reps. Phil Roe (R-TN), Mark Pocan (D-WI), and Jared Polis (D-CO).

The legislation would permanently codify, or make permanent in the law, PPY moving forward. The bill also includes additional important efforts in FAFSA simplification, including making the FAFSA available on mobile devices, requiring regular reports from the Department of Education (ED) on FAFSA simplification progress, and strengthening and solidifying an additional simplification tool: the Internal Revenue Service (IRS) Data Retrieval tool (DRT).

Furthermore, the bill would modify a small provision in current law that would facilitate the earlier release of final Pell Grant numbers from ED, giving colleges the opportunity to provide accurate scholarship and grant information much earlier. This change was highlighted by NASFAA.

In a letter submitted to committee leaders in support of this piece of legislation, NASFAA President Justin Draeger remarked, “The Simplifying the Application for Student Aid Act represents a necessary step toward ensuring a streamlined and more accurate federal financial aid application process. We thank you for this bill and encourage immediate adoption of this piece of legislation for the sake of the students and families across America navigating the financial aid process when the FAFSA becomes available on October 1, 2016.”

Counseling

HR 3179, the Empowering Students Through Enhanced Financial Counseling Act, introduced by Reps. Brett Guthrie (R-KY), Rick Allen (R-GA), and Suzanne Bonamici (D-OR), would implement new requirements designed to ensure that students make informed decisions when accepting federal loans and Pell Grants.

The bill would change the current one-time entrance counseling requirement for student loans into an annual counseling requirement that must be completed before the student accepts the loan(s). Passive confirmation of a subsequent loan would no longer be permitted. That is, students must, annually, actively accept every loan by either signing a Master Promissory Note or signing a statement accepting the loan.

The required content of exit counseling would be expanded to include more borrower-specific information, including:

Contact information for the servicers of each of the borrower’s loans;

To the extent practicable, a summary of the outstanding balance of principal and interest due on the loans made to the borrower; and

Information on the repayment plans available, including a description of the different features of each plan and information – based on the borrower’s outstanding balance – showing the borrower’s anticipated monthly payments, the difference in interest paid, and total payments, under each plan.

The bill also calls for annual counseling for Pell Grant recipients (regardless of whether they are also borrowing a loan) prior to the first disbursement of a Pell Grant in an award year. The counseling would be required to include explanations of:

A Federal Pell Grant;

Approved educational expenses for which the student may use a Federal Pell Grant;

Why a student may have to repay the Federal Pell Grant;

The maximum number of semesters or equivalent for which the student may be eligible to receive a Federal Pell Grant, and a statement of the amount of time remaining for which the student may be eligible to receive a Federal Pell Grant;

How the student may budget for typical educational expenses and a sample budget based on the cost of attendance for the institution; and

How the student may seek additional financial assistance from the institution’s financial aid office due to a change in the student’s financial circumstances, and the contact information for such office.

Institutions could provide this counseling through a consumer-tested, online counseling tool administered by ED, an online tool created for the institution, or directly in an in-person session.

This bill passed through the full House of Representatives in 2014, but was never considered in the Senate.

College Dashboard

HR 3178, the Strengthening Transparency in Higher Education Act, was introduced by Reps. Virginia Foxx (R-NC), Luke Messer (R-IN) and Gregorio Sablan (D-Northern Mariana Islands). It would eliminate the College Navigator and its associated affordability and transparency lists, and state higher education charts released by ED. In its place would be a College Dashboard Website, which would be developed and maintained by ED. The Dashboard would include institutional-level information related to:

Basic institutional facts, such as its sector and web address;

Enrollment;

Completion rates;

Costs;

Financial aid; and

Cohort default rates.

The legislation would mandate that ED include a method for Dashboard users to easily compare institutions.

Finally, the bill would require institutions to ensure that net price calculators are easily identifiable and prominently posted on institutions’ websites, where cost and student aid information is already available.

This bill passed through the full House of Representatives in 2014, but was never considered in the Senate.

HBCUs

H.R. 5530, the HBCU Capital Financing Improvement Act, was introduced by Reps. Alma Adams (D-NC) and Bradley Byrne (R-AL). This bill aims to improve the HBCU Capital Financing Program, which was created by Congress to provide low-cost capital to finance improvements to campus infrastructure at HBCUs. The bill enables ED to help schools understand what financial resources are available.

First, the bill would improve the HBCU Capital Financing program by requiring an advisory board to send an annual report to Congress with an overview of the programs and administrative and legislative recommendations. The bill would also allow for financial counseling to potentially eligible HBCUs to assist them before and after applying for a capital improvement loan. The bill would also change the name of the escrow account program to the “bond insurance fund” to better reflect its purpose to ensure HBCUs do not miss the opportunity to participate because of confusion.

The bill would increase the flexibility of current law to allow HSIs to use grant funds to encourage post-baccalaureate students to enroll in doctoral degree programs that prepare students for health care occupations. The funds could be used for mentoring, counseling, advising, and other student support services aimed at successful enrollment in doctoral programs in health care. In addition, the bill would allow HSIs to use grant money to support developing or growing dual and concurrent enrollment programs.

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Passage of these bills represents the first action on higher education from the education committees in both the House of Representatives or the Senate in the 114th Session of Congress, which began in January 2015. While these bills are likely to pass the entire House, it is unlikely at this point that the Senate will take them up for consideration. Even though reauthorization of the Higher Education Act is due for consideration, most observers expect little action in the relatively short time remaining before a new Congress is sworn in in January 2017.

NASFAA will continue to monitor action on these bills and maintains a comprehensive listing of legislation introduced so far in this session of Congress in the NASFAA Legislative Tracker.

Publication Date: 6/23/2016

David S |
6/23/2016 11:29:33 AM

Let's see...College Navigator, College Scorecard, College Dashboard...a prize to whoever can describe the difference between them other than the name. This would be like legislation that says everything that is currently "red" must now be "crimson" instead.

I'm not sure what problems the required Pell counseling is supposed to solve. Yes, there's a budgeting piece, and students need to know how to budget money and many do not, but why is this only required then for Pell recipients? There are non-aid recipients who don't know how to budget, as well as aid recipients who don't qualify for Pell. And while I agree that loan acceptance should never be passive - I suspect that many of the Corinthian-type horror stories out there involve passive loan acceptance - please, the "signing a statement accepting the loan" HAS to include checking the "accept" box online.

Mobile device FAFSA...I like it. Those of us old enough to think that sitting down at a desktop to do a FAFSA with no paper is a revelation...well, we're old. Millennials think sitting down at a desktop to do it is old.

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